Goldman Sachs: Mainland logistics competition intensifies, earnings forecasts cut; JD Logistics (02618) rated Buy

Stock News
11/10

Goldman Sachs has released a research report noting that the third-quarter earnings season for A-share logistics companies in mainland China has concluded, showing a divergent landscape.

Due to the reappearance of price competition in key regions and slowing demand, the bank has further lowered its industry profit forecasts for 2027 and 2028 by 0.4% and 1.4%, respectively.

The only logistics stock in the sector that the bank rates as "Buy" is JD Logistics (02618), with a target price of HK$17.

The bank points out that profit divergence among franchise-model express delivery companies has widened.

STO Express (002468.SZ) and YTO Express (600233.SH), which gained market share, saw EBIT grow 72% and 47% year-on-year, respectively, while Yunda Holding (002120.SZ), which lost share, recorded a 13% year-on-year decline in EBIT.

Integrated logistics companies recorded steady profit growth.

For example, SF Holding (06936) saw EBIT rise 15% year-on-year, leveraging cost efficiency to counter the slowdown in its core time-sensitive business and rising fuel price pressures.

In the freight forwarding segment, Sinotrans (00598) posted 13% EBIT growth, benefiting from the reduction of low-margin freight capacity and approximately 60% growth in operating profit from joint ventures.

The bank states that although sector valuations have been compressed, it remains selective, favoring companies with unique earnings drivers, as competition intensified again in the third quarter, with rivals adopting aggressive strategies to capture market share and industry growth slowing further.

Among them, STO Express grew 18% year-on-year, J&T Express grew 15% year-on-year, and YTO Express grew 12% year-on-year, all recording double-digit volume growth, outperforming the industry average.

The only logistics stock the bank rates as "Buy" is JD Logistics, which has a favorable earnings mix, with forecast net profit growth of 10% and 35% for the third and fourth quarters, respectively, and a valuation of 6 times the 2027 forecast price-to-earnings ratio.

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